Finding a Niche in Pellets

Last month, I was talking to Ontario Power Generation’s Director of Business Development Brent Boyko about the conversion of Atikokan Generating Station (from coal to wood pellets) and he mentioned that part of the wood pellets that will fuel the AGS plant after its conversion will come from Rentech Inc.

I had to think about that for a moment, because I had known Rentech was working on jet fuel for a while, followed by a biomass power plant, but I didn’t know they had entered the pellet business.

Turns out, they have acquired Georgia-based Fulghum Fibers, the leading provider of contract wood chip processing services in the U.S. Fulghum has a total of 32 mills, 26 in the U.S. and six in South America, that process 15 million metric tons of wood and bark annually.

Rentech's recently announced plans involve converting two decommissioned wood processing facilities in Ontario to wood pellet plants, and the company reported that contracts are already in place for the sale and transport of approximately 445,000 annual metric tons of wood pellets over ten years.

One of the contracts is with OPG, and the other is a 10-year, 400,000 metric tons-per-year supply contract with Drax (which is performing a massive biomass conversion that you'll find featured in the June issue of Biomass Magazine).

Both conversions are expected to be finished by the end of next year, in order to fulfill contracts, and an agreement with the Port of Quebec is also in place, Rentech said.

A notice released from the company discusses how the acquisition provides a platform to launch into the growing and complementary global wood pellet industry. With the acquisition, it has also entered a joint venture with Graanul Invest, a European pellet producer, for development and construction of U.S. pellet plants. Graanul has designed, built, and operates six pellet facilities in Europe, which produce 830,000 tons of pellets annually.

This just reiterates the fact that the North American wood pellet industry is bursting at the seams with opportunity, and it is being recognized and seized, even by those without a track record in the industry, or the wood pellet segment specifically.

I think the stories you will find in this month’s Pellet Mill Monthly newsletter—as well as in the Q2 issue of Pellet Mill Magazine, which is just around the corner—further back that assertion up.